1 00:00:07,840 --> 00:00:11,039 Speaker 1: Hi everyone, and welcome to Bloomberg Intelligence Talking Transports Podcast. 2 00:00:11,080 --> 00:00:14,440 Speaker 1: I'm your host, Lee klascaused your freight transportation logistics analyst 3 00:00:14,440 --> 00:00:18,000 Speaker 1: at Bloomberg Intelligence, Bloomberg's in house research arm of almost 4 00:00:18,000 --> 00:00:21,640 Speaker 1: five hundred analysts and strategists. Before diving in a little 5 00:00:21,640 --> 00:00:24,640 Speaker 1: public service announcement, your support is instrumental to keep bringing 6 00:00:24,680 --> 00:00:27,800 Speaker 1: great guests onto the podcast like the one we have today. 7 00:00:28,240 --> 00:00:30,280 Speaker 1: If you haven't already, please do take a moment to 8 00:00:30,360 --> 00:00:33,760 Speaker 1: follow rate and share the Talking Transports podcast with your 9 00:00:33,760 --> 00:00:37,680 Speaker 1: friends and family. We appreciate your support. I'm very excited 10 00:00:37,720 --> 00:00:41,800 Speaker 1: to have Brent Hudo truck Stops Chief Relationship Officer. Brent 11 00:00:41,920 --> 00:00:44,760 Speaker 1: has held a number of roles at truck Stop since 12 00:00:44,800 --> 00:00:48,000 Speaker 1: joining the company in twenty thirteen. He's been involved in 13 00:00:48,040 --> 00:00:52,400 Speaker 1: the freight transportation industry for over three decades. Brent speaks 14 00:00:52,400 --> 00:00:57,000 Speaker 1: broadly within transportation, including testifying to the Senate Transportation Committee. 15 00:00:57,240 --> 00:01:02,200 Speaker 1: He also published within support chain media, including the Harvard 16 00:01:02,240 --> 00:01:05,720 Speaker 1: Business Review. Presently, he serves on the boards committees and 17 00:01:05,760 --> 00:01:11,399 Speaker 1: it has membership with the TIA, CSCMP, NASTRAK, scn r A, 18 00:01:12,240 --> 00:01:18,279 Speaker 1: the ATA, TCA, NPTCA, IYANA and Italy and proudly serves 19 00:01:18,319 --> 00:01:21,400 Speaker 1: on the board of the American Logistics Aid Network and 20 00:01:21,959 --> 00:01:25,920 Speaker 1: as well as in the Women and Trucking Foundation. He's 21 00:01:25,959 --> 00:01:29,160 Speaker 1: been happily married to Teresa for twenty nine years and 22 00:01:29,200 --> 00:01:32,720 Speaker 1: has a total of six children. Welcome to the Talking 23 00:01:32,920 --> 00:01:34,520 Speaker 1: Transports podcast, Brent. 24 00:01:34,800 --> 00:01:37,840 Speaker 2: Oh Man Lee, thank you so much for having me 25 00:01:37,880 --> 00:01:42,560 Speaker 2: on today. I have enjoyed the relationship with Bloomberg for 26 00:01:42,720 --> 00:01:45,000 Speaker 2: my eleven years at truck Stop, and I know you've 27 00:01:45,040 --> 00:01:47,040 Speaker 2: been associated with truck Stop for longer than that, but 28 00:01:48,080 --> 00:01:49,720 Speaker 2: you know, it's it's just a joy to be on 29 00:01:49,800 --> 00:01:52,400 Speaker 2: to talk about this and continue to help people know 30 00:01:52,440 --> 00:01:54,880 Speaker 2: more and more about our industry that serves the American 31 00:01:54,920 --> 00:01:57,040 Speaker 2: public really really well. 32 00:01:56,800 --> 00:02:00,000 Speaker 1: Well, thank thanks for coming in and as a public 33 00:02:00,080 --> 00:02:03,000 Speaker 1: service announcement, Brenton is one of my favorite people. 34 00:02:02,920 --> 00:02:05,560 Speaker 2: In the trucking industry save here at Bell. 35 00:02:05,840 --> 00:02:07,640 Speaker 3: Thank you very much. Thank you very much. 36 00:02:08,720 --> 00:02:11,440 Speaker 1: So tell me, you know everyone, when you say truck stop, 37 00:02:11,480 --> 00:02:13,160 Speaker 1: people are thinking of a rest stop where you can 38 00:02:13,200 --> 00:02:14,959 Speaker 1: buy some beef, jerky and some soda. 39 00:02:15,200 --> 00:02:16,000 Speaker 3: What is truck stop? 40 00:02:16,040 --> 00:02:18,720 Speaker 2: Well, you can do that at truck stops. Absolutely. We're 41 00:02:18,760 --> 00:02:22,160 Speaker 2: a technology company, software as a service company that started 42 00:02:22,200 --> 00:02:25,840 Speaker 2: in nineteen ninety five by a really smart physicist named 43 00:02:25,840 --> 00:02:29,120 Speaker 2: Scott Moscript and used to find loads for trucks at 44 00:02:29,160 --> 00:02:31,040 Speaker 2: truck stops. So he said, well, we're going to be 45 00:02:31,240 --> 00:02:34,000 Speaker 2: on the Internet. So we're the Internet truck stop, and 46 00:02:34,040 --> 00:02:36,000 Speaker 2: now we're just known as truck stop. But basically we're 47 00:02:36,040 --> 00:02:41,000 Speaker 2: a technology that helps small trucking companies in some larger 48 00:02:41,040 --> 00:02:44,640 Speaker 2: trucking companies work with the brokerage industry inside of the 49 00:02:44,760 --> 00:02:48,800 Speaker 2: US freight transportation marketplace to move predominantly what are known 50 00:02:48,840 --> 00:02:53,639 Speaker 2: as the spot market loads. So the marketplace says, we'll 51 00:02:53,639 --> 00:02:56,239 Speaker 2: talk about some continues to kind of all come together, 52 00:02:56,320 --> 00:02:58,600 Speaker 2: so it's not really the spot market anymore. And there's 53 00:02:58,639 --> 00:03:01,679 Speaker 2: this unique spot mart market and there's this unique other 54 00:03:01,720 --> 00:03:03,440 Speaker 2: part of the market known as the contract part of 55 00:03:03,440 --> 00:03:07,200 Speaker 2: the marketplace. But we serve all of that marketplace and 56 00:03:08,600 --> 00:03:10,160 Speaker 2: we don't take it lightly. We try to make just 57 00:03:10,200 --> 00:03:13,120 Speaker 2: affordable technology so they can get all these players can 58 00:03:13,160 --> 00:03:15,760 Speaker 2: get all the information on the marketplace so they can 59 00:03:15,760 --> 00:03:18,480 Speaker 2: transact together. We're just the middle data company in the 60 00:03:18,520 --> 00:03:20,680 Speaker 2: middle that clears and cleans the data to make sure 61 00:03:20,680 --> 00:03:23,160 Speaker 2: that they can meet all the federal regulations to be 62 00:03:23,200 --> 00:03:26,200 Speaker 2: able to work together and transact and move free. So 63 00:03:26,240 --> 00:03:27,639 Speaker 2: we enjoy work do a lot. 64 00:03:28,280 --> 00:03:31,600 Speaker 1: Right, And so your customers are the owner operators smaller fleets, 65 00:03:31,639 --> 00:03:34,960 Speaker 1: they're the freight brokers. And then are they the shippers themselves? 66 00:03:35,040 --> 00:03:38,320 Speaker 2: Yeah, well so that's interesting. So does this marketplace is 67 00:03:38,400 --> 00:03:42,320 Speaker 2: technology lee? As you guys have watched at Bloomberg, so astutely, 68 00:03:43,680 --> 00:03:46,640 Speaker 2: technology continues to sort of blend markets together. So you've 69 00:03:46,680 --> 00:03:48,880 Speaker 2: got three different people that need to move freight in 70 00:03:48,880 --> 00:03:50,800 Speaker 2: the United States. You get shippers that manufacture it, so 71 00:03:50,800 --> 00:03:53,520 Speaker 2: that's the manufacturers that's known as a shipper. You've got 72 00:03:53,520 --> 00:03:56,600 Speaker 2: the actual transportation providers, and that's the carriers, and that's 73 00:03:56,600 --> 00:04:00,200 Speaker 2: anybody from a one truck to night swift US Express 74 00:04:00,200 --> 00:04:03,200 Speaker 2: the largest in the United States, and so and then 75 00:04:03,240 --> 00:04:05,640 Speaker 2: you've got brokerage companies that sit in the middle, which 76 00:04:05,640 --> 00:04:08,120 Speaker 2: are the middlemen, and they work with the manufacturers to 77 00:04:08,120 --> 00:04:10,360 Speaker 2: move it. So there's this blend of all of it. 78 00:04:10,720 --> 00:04:13,640 Speaker 2: And so the US marketplace has changed quite a lot 79 00:04:14,320 --> 00:04:16,719 Speaker 2: since I came in in twenty thirteen, and certainly since 80 00:04:16,760 --> 00:04:19,280 Speaker 2: we started in nineteen ninety five, where a lot of 81 00:04:19,320 --> 00:04:22,920 Speaker 2: the players that have that are carriers, also have brokerage 82 00:04:23,000 --> 00:04:25,279 Speaker 2: arms because they can move more freight without having to 83 00:04:25,279 --> 00:04:28,200 Speaker 2: buy more trucks, and so it's one sort of you've 84 00:04:28,240 --> 00:04:29,920 Speaker 2: seen it as much as I that sort of I 85 00:04:29,960 --> 00:04:33,280 Speaker 2: wouldn't say consolidation. I'd just say this sort of blending 86 00:04:33,320 --> 00:04:36,880 Speaker 2: together of all these participants where you find the most 87 00:04:36,920 --> 00:04:39,880 Speaker 2: efficient way to move freight in the United States. So 88 00:04:39,960 --> 00:04:41,760 Speaker 2: we really saw that during the pandemic, which was sort 89 00:04:41,800 --> 00:04:43,880 Speaker 2: of a oh my gosh, I can't find a truck anywhere. 90 00:04:43,880 --> 00:04:46,200 Speaker 2: I'll take anybody that can move freight, and so it 91 00:04:46,279 --> 00:04:49,159 Speaker 2: became much more of a blended marketplace at that point, right. 92 00:04:49,320 --> 00:04:52,120 Speaker 1: And we've seen over the years companies like Werner, JB. Hunt, 93 00:04:52,240 --> 00:04:55,320 Speaker 1: Night Swift kind of expand their brokerage businesses because to 94 00:04:55,360 --> 00:04:57,160 Speaker 1: your point, you know, when they want to grow, they'd 95 00:04:57,240 --> 00:05:01,400 Speaker 1: rather build to handle shippers loads in an asset later 96 00:05:01,520 --> 00:05:04,400 Speaker 1: non asset matter rather than you know, having to make 97 00:05:04,440 --> 00:05:07,120 Speaker 1: those big investments in trucks. And you know, when the 98 00:05:07,200 --> 00:05:09,520 Speaker 1: demand's out there, the trucks don't move, so you know 99 00:05:09,560 --> 00:05:13,000 Speaker 1: it tends to be a better ROI on the broker's side. 100 00:05:12,839 --> 00:05:14,800 Speaker 2: Yeah, for sure, you've seen that across the board. I 101 00:05:15,480 --> 00:05:18,039 Speaker 2: go to lots of the financial reporting conferences of the 102 00:05:18,040 --> 00:05:22,800 Speaker 2: public companies, and I've watched just about every large fleet 103 00:05:23,480 --> 00:05:27,880 Speaker 2: go from talking about their brokerage last in their public 104 00:05:27,880 --> 00:05:31,640 Speaker 2: disclosures to moving it almost to first or second. I 105 00:05:31,720 --> 00:05:33,880 Speaker 2: remember a great quote by Derek Leathers at Werner when 106 00:05:33,880 --> 00:05:36,520 Speaker 2: I was at this conference in January, where he said 107 00:05:36,560 --> 00:05:38,760 Speaker 2: he was going to be moving a tremendous amount of 108 00:05:38,800 --> 00:05:42,240 Speaker 2: his one way long haul freight, which is predominantly what 109 00:05:42,440 --> 00:05:45,280 Speaker 2: runs in the spot market, over to his brokerage, and 110 00:05:45,560 --> 00:05:48,600 Speaker 2: his brokerage was moving over a billion dollars in revenue 111 00:05:48,960 --> 00:05:50,720 Speaker 2: in their company. And so it just shows you kind 112 00:05:50,720 --> 00:05:53,120 Speaker 2: of like the you know, you can't beat math, and 113 00:05:53,160 --> 00:05:55,840 Speaker 2: the mathematics are if wherever you can find the capacity 114 00:05:55,920 --> 00:05:57,920 Speaker 2: or the truck to move it at the best price, 115 00:05:58,520 --> 00:06:00,159 Speaker 2: and you've got profit to make on the other and 116 00:06:00,279 --> 00:06:01,919 Speaker 2: on the loads, you're going to find that. You know 117 00:06:02,000 --> 00:06:04,919 Speaker 2: that that that water seeks the right level no matter what, 118 00:06:05,640 --> 00:06:09,359 Speaker 2: and inside of our supply and demand marketplace, it always does. 119 00:06:09,680 --> 00:06:11,400 Speaker 2: And so we've gotten to go through some really really 120 00:06:11,480 --> 00:06:14,360 Speaker 2: fun things, crazy things, and lasted the pandemic and now 121 00:06:14,560 --> 00:06:16,080 Speaker 2: which will be great to talk about today. 122 00:06:16,520 --> 00:06:18,880 Speaker 1: Yeah, so you know I wanted to bring you on 123 00:06:19,080 --> 00:06:21,480 Speaker 1: for a number of reasons. You know, there's a lot 124 00:06:21,480 --> 00:06:24,320 Speaker 1: of uncertainty about what's going on the trucking world. 125 00:06:24,839 --> 00:06:25,080 Speaker 2: Uh. 126 00:06:25,120 --> 00:06:27,400 Speaker 1: To say the least, you know, the spot market tends 127 00:06:27,400 --> 00:06:29,000 Speaker 1: to be the can area and the coal mine for 128 00:06:29,040 --> 00:06:33,320 Speaker 1: the contract market. A lot of the publicly traded trucking companies, 129 00:06:33,320 --> 00:06:38,040 Speaker 1: they deal primarily at least their you know, their asset business, UH, 130 00:06:38,120 --> 00:06:42,160 Speaker 1: deal primarily in the contract world, with very little exposure 131 00:06:42,160 --> 00:06:45,040 Speaker 1: to SPOT. But again, spots kind of the leading indicator. 132 00:06:45,880 --> 00:06:48,119 Speaker 1: We've partnered with Trucks Stop for a number of years. 133 00:06:48,160 --> 00:06:50,360 Speaker 1: We have a lot of their data on the Bloomberg terminal. 134 00:06:50,400 --> 00:06:52,040 Speaker 1: You can find a lot of that data at b 135 00:06:52,200 --> 00:06:55,640 Speaker 1: I space t r c k go. That's the North 136 00:06:55,640 --> 00:06:59,520 Speaker 1: American Trucking Dashboard. You know, one of one of my 137 00:06:59,520 --> 00:07:03,160 Speaker 1: my favorite industries that you guys have is your MDI index, 138 00:07:03,839 --> 00:07:07,080 Speaker 1: which measures relative supply and demand, which is a gauge 139 00:07:07,120 --> 00:07:09,520 Speaker 1: of you know, how loose or how tight the market. 140 00:07:09,760 --> 00:07:12,400 Speaker 1: Can you talk about you know where the MDI is today, 141 00:07:14,080 --> 00:07:16,960 Speaker 1: where do you think it's heading, and maybe where it's 142 00:07:17,000 --> 00:07:19,640 Speaker 1: been because to give some people some context of what's 143 00:07:19,680 --> 00:07:21,200 Speaker 1: been happening over the last couple of years. 144 00:07:21,280 --> 00:07:23,440 Speaker 2: Yeah, for sure, you know that the NDA has been 145 00:07:23,440 --> 00:07:26,160 Speaker 2: out for a long time and we've been partnering with 146 00:07:26,160 --> 00:07:29,800 Speaker 2: Bloomberg for more than a decade and so and you 147 00:07:29,840 --> 00:07:31,880 Speaker 2: guys were one of the first in the marketplace to 148 00:07:32,120 --> 00:07:35,520 Speaker 2: recognize the uniqueness of the spot market data. You talked 149 00:07:35,520 --> 00:07:37,280 Speaker 2: about the canary and the coalman. I want to address 150 00:07:37,320 --> 00:07:39,560 Speaker 2: that first. Which is the reason it's the canary in 151 00:07:39,600 --> 00:07:43,200 Speaker 2: the COmON is because all data lags, no matter what data. 152 00:07:43,200 --> 00:07:45,120 Speaker 2: If you're looking at the government data, good and it's 153 00:07:45,120 --> 00:07:47,400 Speaker 2: going to be six months probably or more that you're 154 00:07:47,400 --> 00:07:49,960 Speaker 2: going to get really relevant data, which is which is great, 155 00:07:49,960 --> 00:07:51,880 Speaker 2: but you can't really make a decision six months after 156 00:07:51,920 --> 00:07:55,320 Speaker 2: it's happened, right So, and even in transportation, in trucking, 157 00:07:55,840 --> 00:07:58,640 Speaker 2: the American Trucking Association and my good friend Bob Costillity 158 00:07:58,680 --> 00:08:01,080 Speaker 2: there does a good job in looking at the overall 159 00:08:01,440 --> 00:08:04,760 Speaker 2: macro part of the transportation marketplace, but even that data 160 00:08:05,120 --> 00:08:07,720 Speaker 2: can be ninety days delayed because he's getting it from 161 00:08:07,720 --> 00:08:09,200 Speaker 2: big players and other ones like that. 162 00:08:09,600 --> 00:08:11,880 Speaker 1: The reason and by the way, we love Bob Cassel, 163 00:08:11,960 --> 00:08:14,720 Speaker 1: he was a previous game. Oh yeah, bobka for everyone listening, 164 00:08:14,800 --> 00:08:16,640 Speaker 1: go back to the one we do a Bob Castell 165 00:08:16,760 --> 00:08:17,360 Speaker 1: from ata. 166 00:08:17,760 --> 00:08:19,400 Speaker 3: Sorry, Bradon, go on, Bob. 167 00:08:19,440 --> 00:08:21,200 Speaker 2: Bob's a great guy. He looks much better in his 168 00:08:21,280 --> 00:08:23,840 Speaker 2: beard than without his beard, so he's a great guy. 169 00:08:23,840 --> 00:08:27,160 Speaker 2: It's been a good friend for a long time. But 170 00:08:27,240 --> 00:08:32,720 Speaker 2: the reason that the Spot market data is the canary 171 00:08:32,720 --> 00:08:37,679 Speaker 2: in the coal mine is because it's so immediate, it's 172 00:08:37,720 --> 00:08:42,600 Speaker 2: so recent. You can get data seven days ago that 173 00:08:42,760 --> 00:08:46,560 Speaker 2: is micro data on the macro part of the Spot market, 174 00:08:46,920 --> 00:08:49,480 Speaker 2: all the way down to every single piece of movement, 175 00:08:49,480 --> 00:08:51,840 Speaker 2: whether it's drivan, whether it's flatbed, whether it's reefer, whether 176 00:08:51,840 --> 00:08:55,040 Speaker 2: it specialized, whether it's oversized, every dimensial broken down in 177 00:08:55,160 --> 00:08:58,320 Speaker 2: granular ways, which it's really hard for anybody else in 178 00:08:58,320 --> 00:09:00,480 Speaker 2: the marketplace to do that because there's so many players 179 00:09:00,720 --> 00:09:03,280 Speaker 2: and they're individual players, the private companies, some of them 180 00:09:03,280 --> 00:09:05,240 Speaker 2: are public, but it's all really kind of private information 181 00:09:05,320 --> 00:09:08,439 Speaker 2: that's not reported. But in the Spot market because you've 182 00:09:08,480 --> 00:09:11,679 Speaker 2: got two major players, truck Stop and our major competitor 183 00:09:12,040 --> 00:09:15,280 Speaker 2: that served ninety nine point nine percent this marketplace, and 184 00:09:15,360 --> 00:09:20,120 Speaker 2: most customers lead use both services, so it's incredibly rich 185 00:09:20,240 --> 00:09:24,800 Speaker 2: data that shows you what a marketplace has done, and 186 00:09:24,840 --> 00:09:27,880 Speaker 2: it's kind of like the reverse the Spot market data. 187 00:09:28,000 --> 00:09:30,160 Speaker 2: It looks like it's the leading indicator, but it's actually 188 00:09:30,200 --> 00:09:33,640 Speaker 2: a following indicator of what the macro US economy is 189 00:09:33,720 --> 00:09:36,679 Speaker 2: doing because as frame moves, you see that. Even though 190 00:09:36,679 --> 00:09:39,160 Speaker 2: it can be a leading indicator, because as I said, 191 00:09:39,720 --> 00:09:43,400 Speaker 2: it's the most recent data. So we developed this index 192 00:09:44,040 --> 00:09:46,760 Speaker 2: Gosh I think almost twenty years ago, called the market 193 00:09:46,760 --> 00:09:49,760 Speaker 2: demand index, where we took the available freight in the 194 00:09:49,760 --> 00:09:53,080 Speaker 2: spot market over the available posted trucks empty and raate 195 00:09:53,080 --> 00:09:55,160 Speaker 2: a hall in the spot market. It's not a perfect figure, 196 00:09:55,520 --> 00:09:57,400 Speaker 2: but it's the only one out there that measures that 197 00:09:57,520 --> 00:10:01,000 Speaker 2: relative pressure in the marketplace. And it used to be 198 00:10:01,360 --> 00:10:04,680 Speaker 2: before the pandemic, the balance was thirty and when the 199 00:10:04,679 --> 00:10:07,200 Speaker 2: marketplace was at balance, where it was equal balance between 200 00:10:07,240 --> 00:10:10,040 Speaker 2: the brokers that are moving the freight for shippers and 201 00:10:10,120 --> 00:10:13,560 Speaker 2: the carriers in this marketplace could negotiate, the balance was thirty. Well, 202 00:10:13,600 --> 00:10:16,680 Speaker 2: the balance during the pandemic went crazy. There was no balance. 203 00:10:16,720 --> 00:10:21,040 Speaker 2: It went up to almost two hundred, totally favoring everybody 204 00:10:21,040 --> 00:10:23,680 Speaker 2: that had a truck. They were getting not the normal 205 00:10:23,760 --> 00:10:25,560 Speaker 2: two dollars and twenty cents a mile, which is the 206 00:10:25,559 --> 00:10:28,480 Speaker 2: sort of historic average. They were getting three dollars, four dollars, 207 00:10:28,559 --> 00:10:31,800 Speaker 2: five dollars, name your price, they could get it because 208 00:10:31,800 --> 00:10:34,960 Speaker 2: you couldn't find a truck to move. The amount of 209 00:10:35,120 --> 00:10:37,240 Speaker 2: goods that have been purchased that that were almost one 210 00:10:37,280 --> 00:10:40,920 Speaker 2: hundred percent increase over what was normal in the marketplace. 211 00:10:40,960 --> 00:10:43,680 Speaker 2: So it favored trucking for a long time. And so 212 00:10:44,040 --> 00:10:47,439 Speaker 2: you had these crazy numbers in the market demand index. 213 00:10:47,960 --> 00:10:50,880 Speaker 2: But now it's kind of come back down. The market normalized, 214 00:10:50,920 --> 00:10:53,960 Speaker 2: and I'm going to tell you normalized because a lot 215 00:10:53,960 --> 00:10:55,560 Speaker 2: of people said, well, we've had a we've had a 216 00:10:55,600 --> 00:10:58,240 Speaker 2: trucking recession. We've had a recession. First off, we've had 217 00:10:58,240 --> 00:11:01,080 Speaker 2: no recession in the macro economy, but we definitely have 218 00:11:01,120 --> 00:11:03,600 Speaker 2: had a recession inside of the trucking industry. But it's 219 00:11:03,640 --> 00:11:06,199 Speaker 2: not a freight volume it's not a freight availability or 220 00:11:06,200 --> 00:11:09,760 Speaker 2: freight volume recession. It's been a pricing recession. That's been 221 00:11:09,800 --> 00:11:12,240 Speaker 2: the big deal, because the prices were so high during 222 00:11:12,240 --> 00:11:15,160 Speaker 2: the pandemic that they had to come down to normal. 223 00:11:15,200 --> 00:11:19,480 Speaker 2: Because we live and serve at a standard supply and 224 00:11:19,559 --> 00:11:23,319 Speaker 2: demand marketplace that just in freight costs over a trillion dollars. 225 00:11:23,400 --> 00:11:25,640 Speaker 2: So when you look at it, but the market demand 226 00:11:25,679 --> 00:11:29,480 Speaker 2: index has come back down, but it has balanced back down. 227 00:11:29,559 --> 00:11:30,880 Speaker 2: I will tell you the balance is going to be 228 00:11:30,920 --> 00:11:34,199 Speaker 2: about fifty five, but it has been above that because 229 00:11:34,240 --> 00:11:38,920 Speaker 2: there's been the normal amount of freight available and been 230 00:11:39,360 --> 00:11:44,000 Speaker 2: there's been price reductions or price depression or pressure downward 231 00:11:44,040 --> 00:11:46,720 Speaker 2: on the pricing in the spot market, which puts the 232 00:11:46,760 --> 00:11:50,760 Speaker 2: market demand index pressure above normal, which should favor truckers 233 00:11:51,120 --> 00:11:54,680 Speaker 2: in the pricing, but it doesn't because there's so much 234 00:11:54,720 --> 00:11:57,840 Speaker 2: pressure downward in competition inside the spot market as you 235 00:11:57,840 --> 00:12:00,680 Speaker 2: have hundreds of thousands of players that anticipate in this 236 00:12:00,720 --> 00:12:03,439 Speaker 2: and they all compete for whether whatever, just name the 237 00:12:03,840 --> 00:12:06,480 Speaker 2: type of freight, and that's really what's going on. So 238 00:12:06,559 --> 00:12:10,400 Speaker 2: we've seen this marketplace go from this high of the 239 00:12:10,400 --> 00:12:14,480 Speaker 2: pandemic historic h I've never been the high before, to 240 00:12:14,960 --> 00:12:18,440 Speaker 2: back down to normal starting in about October twenty twenty two, 241 00:12:18,840 --> 00:12:21,800 Speaker 2: normalized all the way through twenty twenty three, and has 242 00:12:21,880 --> 00:12:25,440 Speaker 2: been normal amount available freight through twenty twenty four, which 243 00:12:25,480 --> 00:12:28,080 Speaker 2: makes a lot of these sentiment feel like, oh no, 244 00:12:28,240 --> 00:12:30,199 Speaker 2: we're going to go We're going to the economy is 245 00:12:30,240 --> 00:12:32,200 Speaker 2: going to go through a recession. But that's not the 246 00:12:32,240 --> 00:12:35,480 Speaker 2: case either. If there's some indicators, but that's not the case. Either. 247 00:12:35,520 --> 00:12:38,760 Speaker 2: But it's been a very very interesting market because small 248 00:12:38,800 --> 00:12:43,079 Speaker 2: truckers have struggled in some areas, but the industry itself 249 00:12:43,160 --> 00:12:45,160 Speaker 2: kind of keeps moving along at what I would call 250 00:12:45,200 --> 00:12:46,680 Speaker 2: a marginal rate at. 251 00:12:46,520 --> 00:12:51,520 Speaker 1: This point, right, So why are rates still so depressed? 252 00:12:51,559 --> 00:12:53,880 Speaker 1: So like when I look at your data and I 253 00:12:53,920 --> 00:12:57,480 Speaker 1: exclude fuel surcharges, you know, rates are still down three 254 00:12:57,600 --> 00:13:01,760 Speaker 1: or four percent on averages. They were down seventeen percent 255 00:13:02,000 --> 00:13:04,840 Speaker 1: last year and twelve percent in twenty twenty two. So 256 00:13:05,320 --> 00:13:08,719 Speaker 1: why are rates continuing to decline when it appears that 257 00:13:08,760 --> 00:13:11,199 Speaker 1: were more out of balance from a capacity standard? 258 00:13:11,280 --> 00:13:14,840 Speaker 2: Yeah, for sure, For sure, you got two different pieces 259 00:13:14,880 --> 00:13:17,000 Speaker 2: of information going on here in the in the larger, 260 00:13:17,160 --> 00:13:19,240 Speaker 2: the macro part of the marketplace. So this marketplace is 261 00:13:19,280 --> 00:13:22,080 Speaker 2: made up of over eight hundred million loads that are 262 00:13:22,120 --> 00:13:25,000 Speaker 2: moved every year total in the marketplace about somewhere around 263 00:13:25,000 --> 00:13:27,040 Speaker 2: three hundred million and moved in the truckload part of 264 00:13:27,040 --> 00:13:30,600 Speaker 2: the marketplace. So it's what you've got is you've got 265 00:13:30,760 --> 00:13:33,559 Speaker 2: the contract marketplace, which is which is those large carriers. 266 00:13:33,600 --> 00:13:35,960 Speaker 2: Then you have the spot marketplace. What happened in the 267 00:13:36,000 --> 00:13:40,680 Speaker 2: pandemic was this we had great rates and where there's 268 00:13:40,800 --> 00:13:45,559 Speaker 2: great financial opportunities. People will large medium fleets and larger 269 00:13:45,559 --> 00:13:48,400 Speaker 2: fleets will try to add more trucks, right, But they 270 00:13:48,440 --> 00:13:51,480 Speaker 2: weren't crazy because they've been through this before. They added 271 00:13:51,960 --> 00:13:54,000 Speaker 2: they added a modest amount of trucks. It's sort of 272 00:13:54,000 --> 00:13:56,600 Speaker 2: what would be a predictable amount of trucks. But the 273 00:13:56,640 --> 00:13:59,720 Speaker 2: part of the market that went absolutely berserk and increased 274 00:13:59,760 --> 00:14:03,520 Speaker 2: all almost one hundred percent over prior to the pandemic 275 00:14:03,960 --> 00:14:07,080 Speaker 2: was the one to two truck owner operator. We saw 276 00:14:07,080 --> 00:14:08,559 Speaker 2: this in the day at truck Stop. You can see 277 00:14:08,559 --> 00:14:12,559 Speaker 2: it at the FMCSA. With four higher licensed registrations, we 278 00:14:13,120 --> 00:14:16,920 Speaker 2: doubled the amount of carriers that came into the marketplace. 279 00:14:16,960 --> 00:14:20,400 Speaker 2: And the segment that doubled was the one truck sometimes 280 00:14:20,400 --> 00:14:23,480 Speaker 2: two truck owner operators. And so when you've got so 281 00:14:23,800 --> 00:14:26,240 Speaker 2: the spot market, the reason that rates are depressed so 282 00:14:26,360 --> 00:14:28,240 Speaker 2: much in the spot market is because you have an 283 00:14:28,320 --> 00:14:32,640 Speaker 2: over abundance of capacity. In other words, you've got freights 284 00:14:32,640 --> 00:14:34,960 Speaker 2: come back down to normal. So if you look at 285 00:14:34,960 --> 00:14:38,440 Speaker 2: the freight rates with fuel, they're not too far out 286 00:14:38,440 --> 00:14:40,880 Speaker 2: of balance. The fuel search OURG index has been I 287 00:14:40,880 --> 00:14:42,840 Speaker 2: think it's forty eight cents a mile at this point. 288 00:14:42,920 --> 00:14:46,160 Speaker 2: Right now, but and you figure that out that it's 289 00:14:46,200 --> 00:14:48,600 Speaker 2: not totally out of balance. It's just you've got a 290 00:14:48,600 --> 00:14:51,479 Speaker 2: lot of competition in the one and two truck category, 291 00:14:51,800 --> 00:14:53,680 Speaker 2: and these guys have to these guys and girls have 292 00:14:53,720 --> 00:14:56,200 Speaker 2: to have to survive as a business, so they're taking 293 00:14:56,240 --> 00:15:00,160 Speaker 2: freight on marginal rates, which is depressed, keeping rates depressed down. 294 00:15:00,400 --> 00:15:03,080 Speaker 2: Part of that is it over supply of capacity in 295 00:15:03,120 --> 00:15:06,560 Speaker 2: that in the segment of the spot market. On the 296 00:15:06,560 --> 00:15:10,240 Speaker 2: contract end, the rates were kept high all of twenty 297 00:15:10,320 --> 00:15:15,760 Speaker 2: twenty three because shippers who went through a pricing challenge, 298 00:15:15,800 --> 00:15:18,200 Speaker 2: big time challenge and in all of the pandemic, said 299 00:15:18,240 --> 00:15:19,680 Speaker 2: I don't want to go through that again. I can't 300 00:15:19,720 --> 00:15:22,880 Speaker 2: just kill my budget and not get things delivered. I'm 301 00:15:22,880 --> 00:15:26,200 Speaker 2: going to maintain my pricing to fleets in twenty twenty three, 302 00:15:26,280 --> 00:15:28,160 Speaker 2: in other words, keep the rates kind of high to 303 00:15:28,320 --> 00:15:30,960 Speaker 2: fifty two sixty two seventy where you were at two 304 00:15:31,000 --> 00:15:33,640 Speaker 2: thirty to twenty in the spot market. And that's a 305 00:15:33,640 --> 00:15:35,920 Speaker 2: pretty big variance. Thirty forty cents is obviously a huge 306 00:15:36,040 --> 00:15:40,240 Speaker 2: variance in our segment when everything's measured on pennies. But 307 00:15:40,640 --> 00:15:43,400 Speaker 2: what you're seeingly, you're seeing in the data, I'm seeing 308 00:15:43,440 --> 00:15:46,200 Speaker 2: it in the data. The contract marketplace is continuing to 309 00:15:46,240 --> 00:15:49,840 Speaker 2: come back down to reach its standard water level normal 310 00:15:50,440 --> 00:15:53,480 Speaker 2: because everybody in this marketplace puts pressure back and forth 311 00:15:53,520 --> 00:15:56,040 Speaker 2: when they have the negotiation advantage. Then shippers still have 312 00:15:56,120 --> 00:15:59,360 Speaker 2: that advantage right now because freight volumes have come back 313 00:15:59,400 --> 00:16:03,000 Speaker 2: down and they're not increasing in anywhere they they've come 314 00:16:03,040 --> 00:16:06,640 Speaker 2: down quite a bit back to normal in the entire marketplace. 315 00:16:06,680 --> 00:16:09,640 Speaker 2: And this and part of that is consumer sentiment, where 316 00:16:09,680 --> 00:16:12,800 Speaker 2: we as consumers, your family, my family, you said, I 317 00:16:12,840 --> 00:16:14,360 Speaker 2: had six kids. I get to buy a lot of 318 00:16:14,360 --> 00:16:17,520 Speaker 2: the stuff that're related to logistics, so we need a 319 00:16:17,520 --> 00:16:22,840 Speaker 2: lot of it. So as we continue to see a 320 00:16:23,520 --> 00:16:28,600 Speaker 2: economy that feels like it's not growing, even though the 321 00:16:28,600 --> 00:16:31,800 Speaker 2: GDP has been anywhere between one point six to two 322 00:16:31,880 --> 00:16:34,640 Speaker 2: point one percent, which is sort of like a maintenance 323 00:16:34,720 --> 00:16:39,320 Speaker 2: rate in GDP when things aren't positive and the media 324 00:16:39,520 --> 00:16:42,760 Speaker 2: reports what they report, and you know, people feel like 325 00:16:43,520 --> 00:16:46,560 Speaker 2: there's not enough jobs. People even though jobs there's plenty 326 00:16:46,560 --> 00:16:48,560 Speaker 2: of jobs. People feel like we're in a recession, even 327 00:16:48,600 --> 00:16:50,880 Speaker 2: though we're not in a recession. People feel like there's 328 00:16:51,000 --> 00:16:53,640 Speaker 2: inflation is high, even then inflation has been coming back down, 329 00:16:54,080 --> 00:16:57,000 Speaker 2: so there's all these things that are perceptions that drive sentiment, 330 00:16:57,080 --> 00:17:01,040 Speaker 2: that drive consumer positivity or or hopeful US. And what 331 00:17:01,080 --> 00:17:03,280 Speaker 2: we're seeing over time is that just less goods are 332 00:17:03,320 --> 00:17:06,679 Speaker 2: being purchased because the US consumer, who is the greatest 333 00:17:06,720 --> 00:17:09,640 Speaker 2: consumer in all the world, basically are kind of holding 334 00:17:09,680 --> 00:17:12,720 Speaker 2: on because savings, as you've seen savings a road down 335 00:17:13,320 --> 00:17:17,560 Speaker 2: the federal not the federal, Atlanta Fed, who publishes affordability 336 00:17:17,560 --> 00:17:21,880 Speaker 2: of housing. The affordability housing is still at like seventy 337 00:17:22,040 --> 00:17:23,879 Speaker 2: where it needs to be at one hundred. It was 338 00:17:23,880 --> 00:17:25,359 Speaker 2: at like one hundred and twenty five one hundred and 339 00:17:25,400 --> 00:17:28,199 Speaker 2: thirty during the pandemic. So all these things make people go, 340 00:17:28,840 --> 00:17:30,320 Speaker 2: I'm just going to hold onto my money, so I'm 341 00:17:30,320 --> 00:17:32,520 Speaker 2: not going to buy as many goods. So trucking is 342 00:17:32,520 --> 00:17:33,960 Speaker 2: a reflection of that. And so it's just kind of 343 00:17:34,000 --> 00:17:36,399 Speaker 2: continue to kind of stagnate along where we are. But 344 00:17:36,480 --> 00:17:38,800 Speaker 2: it's not unhealthy. I want to make sure that that 345 00:17:38,840 --> 00:17:41,800 Speaker 2: investors think about that this marketplace is not unhealthy. It's 346 00:17:41,920 --> 00:17:44,200 Speaker 2: just you're dealing with an industry that works on very 347 00:17:44,240 --> 00:17:47,360 Speaker 2: thin margins. And if you're not efficient with your operation 348 00:17:47,840 --> 00:17:51,320 Speaker 2: at operating ratio, if it's not good, you're struggling and 349 00:17:51,480 --> 00:17:54,800 Speaker 2: small truckers don't always focus on their operating ratio, not 350 00:17:55,000 --> 00:17:56,159 Speaker 2: near like larger fleets do. 351 00:17:56,480 --> 00:18:00,000 Speaker 1: Right, you know, the MDI is a great sentiment oh 352 00:18:00,320 --> 00:18:04,720 Speaker 1: index from our standpoint, and we do another sentiment index 353 00:18:04,800 --> 00:18:08,439 Speaker 1: with truck Stop. We have collaborated over the years. We 354 00:18:08,520 --> 00:18:10,399 Speaker 1: do a well you know that's but I'm telling the 355 00:18:10,440 --> 00:18:14,359 Speaker 1: listeners that that we do a quarterly survey with truck 356 00:18:14,400 --> 00:18:17,600 Speaker 1: Stop on the truckload market. Try to figure out, you know, 357 00:18:17,680 --> 00:18:21,080 Speaker 1: where these owner operators, how they're feeling about the future. 358 00:18:21,600 --> 00:18:25,360 Speaker 1: And you know, twenty six percent expect lower volumes over 359 00:18:25,400 --> 00:18:28,480 Speaker 1: the next three to six months, right, which is seven 360 00:18:28,560 --> 00:18:32,199 Speaker 1: hundred basis points higher than our first quarter survey. So 361 00:18:32,240 --> 00:18:34,320 Speaker 1: we just published our second quarter survey, I guess like 362 00:18:34,320 --> 00:18:38,960 Speaker 1: two weeks ago. So you're seeing the sentiment of truckers 363 00:18:39,000 --> 00:18:42,360 Speaker 1: not great. And they're also you know, there's there they're 364 00:18:42,440 --> 00:18:47,480 Speaker 1: kind of rate expectations have worseen since our first quarter survey. 365 00:18:48,000 --> 00:18:50,840 Speaker 1: Thirty four percent of the carriers expect rates decline over 366 00:18:50,880 --> 00:18:53,320 Speaker 1: the next three to six months, which is about eight 367 00:18:53,400 --> 00:18:57,359 Speaker 1: hundred basis points higher than three months ago. So you know, 368 00:18:57,800 --> 00:18:59,920 Speaker 1: while this sounds like doom and gloom, What it tells 369 00:19:00,119 --> 00:19:03,160 Speaker 1: me as an analyst is that you know, when sentiment 370 00:19:03,320 --> 00:19:06,399 Speaker 1: is so low, it's usually a good indication that you 371 00:19:06,400 --> 00:19:10,320 Speaker 1: know the bottom is not only near, but it's it 372 00:19:10,440 --> 00:19:13,159 Speaker 1: might have might have passed us, passed us by. Do 373 00:19:13,240 --> 00:19:15,280 Speaker 1: you do you have any thoughts about you know, when 374 00:19:15,320 --> 00:19:18,719 Speaker 1: you look at the trucking market from your vantage point, like, 375 00:19:18,840 --> 00:19:22,920 Speaker 1: are we at the bottom of the cycle or are 376 00:19:22,920 --> 00:19:24,680 Speaker 1: we in the process of moving up? Or is there 377 00:19:24,680 --> 00:19:26,040 Speaker 1: still more room to go lower? 378 00:19:26,880 --> 00:19:29,800 Speaker 2: Yeah, Sally, that's that's the magical question that everybody has 379 00:19:29,840 --> 00:19:35,040 Speaker 2: asked me since about January of twenty three. We at 380 00:19:35,080 --> 00:19:36,800 Speaker 2: the bottom of the market. Are we going to hit 381 00:19:36,840 --> 00:19:39,080 Speaker 2: the bottom of the market? When's the bottom of the market? 382 00:19:39,880 --> 00:19:42,240 Speaker 2: And what you look at is like presently in the 383 00:19:42,280 --> 00:19:44,639 Speaker 2: spot market last week we were at two dollars and 384 00:19:44,680 --> 00:19:48,160 Speaker 2: thirty six cents. Now, look, that's the carrier price, all right, 385 00:19:48,160 --> 00:19:50,879 Speaker 2: that's not the broker price. Add fifteen percent to it 386 00:19:50,920 --> 00:19:53,639 Speaker 2: and you get about the relative broker price, or the 387 00:19:53,680 --> 00:19:56,520 Speaker 2: price that's charged the shipper somewhere in there. Some is 388 00:19:56,560 --> 00:20:00,520 Speaker 2: higher than that, some's lower than that. But are we 389 00:20:00,560 --> 00:20:02,359 Speaker 2: at the bottom? I would say we've been at the 390 00:20:02,359 --> 00:20:05,520 Speaker 2: bottom for quite a while. But remember we're supplying demand marketplace, 391 00:20:05,560 --> 00:20:10,199 Speaker 2: so it's it's gonna naturally any supplying demand curve, if 392 00:20:10,240 --> 00:20:12,120 Speaker 2: you just look at econ one oh one is going 393 00:20:12,160 --> 00:20:15,760 Speaker 2: to put pressure to be at the normal because that's 394 00:20:15,760 --> 00:20:18,879 Speaker 2: what supplying demand marketplaces do. So we've been at this 395 00:20:19,000 --> 00:20:22,560 Speaker 2: bottom of this curve, and but I'm saying it's not 396 00:20:22,640 --> 00:20:26,639 Speaker 2: an unprofitable bottom because what and I know that when 397 00:20:26,680 --> 00:20:28,840 Speaker 2: you hear the customer, when you hear the owner operator sentiment, 398 00:20:28,880 --> 00:20:32,520 Speaker 2: and I get it from owner operators, there are small operations. 399 00:20:33,720 --> 00:20:39,320 Speaker 2: They don't always have the best operating ratio or even 400 00:20:39,720 --> 00:20:43,200 Speaker 2: understand their operating ratio. It's basically, if I run more miles, 401 00:20:43,359 --> 00:20:47,040 Speaker 2: I make more money. And we all know that that 402 00:20:47,040 --> 00:20:49,680 Speaker 2: that's not always the case, especially in challenging markets. You've 403 00:20:49,680 --> 00:20:54,000 Speaker 2: got to control your costs. So the the small fleets 404 00:20:54,040 --> 00:20:55,359 Speaker 2: are the people that are in ten trucks or the 405 00:20:55,359 --> 00:20:57,200 Speaker 2: medium fleets. The guys that own the hundred trucks or more, 406 00:20:57,280 --> 00:20:58,720 Speaker 2: or the big fleets the guy that the guys that 407 00:20:58,800 --> 00:21:02,200 Speaker 2: don't are girls that more than five hundred trucks. They 408 00:21:02,240 --> 00:21:05,400 Speaker 2: know how to manage their cost very well. So there's 409 00:21:05,440 --> 00:21:08,960 Speaker 2: different parts of the spot market lead because of technology, 410 00:21:08,960 --> 00:21:11,480 Speaker 2: and because they have this availability of understanding their costs better, 411 00:21:11,840 --> 00:21:13,760 Speaker 2: that more and more owner operators are learning how to 412 00:21:13,800 --> 00:21:16,520 Speaker 2: manage their cost So that's one of the reasons why 413 00:21:16,640 --> 00:21:18,360 Speaker 2: so are we at the bottom of this market. We've 414 00:21:18,359 --> 00:21:21,080 Speaker 2: been at the bottom of this market for nine or 415 00:21:21,119 --> 00:21:23,639 Speaker 2: ten or more months, so it's been I'll just say 416 00:21:23,680 --> 00:21:25,280 Speaker 2: it's been more than a year. We've been at the 417 00:21:25,280 --> 00:21:28,440 Speaker 2: bottom where the prices haven't changed much between about two 418 00:21:28,600 --> 00:21:31,680 Speaker 2: thirty and about two forty somewhere there. Now, that's the 419 00:21:32,040 --> 00:21:34,760 Speaker 2: macro price if you drive If you look at drive 420 00:21:34,800 --> 00:21:37,120 Speaker 2: in the dominant part of the marketplace, obviously it's lower 421 00:21:37,160 --> 00:21:39,240 Speaker 2: than that. It's about two dollars and ten cents to 422 00:21:39,320 --> 00:21:41,920 Speaker 2: about a dollar ninety five. It's been in that range, 423 00:21:41,920 --> 00:21:44,280 Speaker 2: which is what every every analyst tends to look at 424 00:21:44,280 --> 00:21:47,960 Speaker 2: because it's the major player in the market. But the 425 00:21:48,040 --> 00:21:50,479 Speaker 2: problem with drive in is that owner operators don't love 426 00:21:50,560 --> 00:21:53,160 Speaker 2: drive in free because it's the most competitive They got 427 00:21:53,160 --> 00:21:55,200 Speaker 2: to compete with every big fleet. They want to compete 428 00:21:55,240 --> 00:21:57,640 Speaker 2: in areas that it's much better for them to get 429 00:21:57,640 --> 00:22:02,359 Speaker 2: a better price, such as flatbed, grigerated, specialized, more specialized hauling, 430 00:22:02,760 --> 00:22:04,439 Speaker 2: and so the operations that are really good at their 431 00:22:04,440 --> 00:22:07,360 Speaker 2: efficiency do pretty well in drive in. But the ones 432 00:22:07,359 --> 00:22:10,080 Speaker 2: that aren't struggle, So you're going to hear. So I'm 433 00:22:10,080 --> 00:22:12,360 Speaker 2: not surprised at all that we looked at trucker sort 434 00:22:12,359 --> 00:22:15,280 Speaker 2: of sentiment in the spot market and it continues to 435 00:22:15,359 --> 00:22:17,879 Speaker 2: kind of erode away where it used to be. It 436 00:22:18,040 --> 00:22:19,840 Speaker 2: was found out fairly balanced about a third to third 437 00:22:19,840 --> 00:22:21,840 Speaker 2: and the third I'm going to be okay, that's kind 438 00:22:21,880 --> 00:22:24,040 Speaker 2: of the same. I'm not going to be okay. Two 439 00:22:24,400 --> 00:22:27,160 Speaker 2: more are thinking, oh gosh, it's really hard out there. 440 00:22:27,640 --> 00:22:31,359 Speaker 2: So but I will say this, and this is so 441 00:22:31,440 --> 00:22:34,120 Speaker 2: important because every analyst I talked to a lot of analysts, 442 00:22:34,200 --> 00:22:37,280 Speaker 2: You're still my favorite analyst, you know. I get talked to. 443 00:22:38,200 --> 00:22:41,800 Speaker 2: The reason that there's still one truck, one truck owner 444 00:22:41,840 --> 00:22:44,040 Speaker 2: operators in this marketplace and they hadn't all gone to 445 00:22:44,040 --> 00:22:46,000 Speaker 2: the wayside or gone back to the least part of 446 00:22:46,040 --> 00:22:48,240 Speaker 2: the marketplace, or just gone back to driving a truck 447 00:22:48,320 --> 00:22:54,200 Speaker 2: or retired is because a one truck operationally can change 448 00:22:54,800 --> 00:23:00,240 Speaker 2: their operation in one day. They can they can can 449 00:23:00,400 --> 00:23:02,800 Speaker 2: decide to not move in that area of the country 450 00:23:02,800 --> 00:23:04,680 Speaker 2: and move in a different area of the country. They 451 00:23:04,720 --> 00:23:07,280 Speaker 2: can get a different they could. They could go from 452 00:23:07,359 --> 00:23:10,199 Speaker 2: drive into flatbed in a heartbeat. They could go that 453 00:23:10,240 --> 00:23:13,120 Speaker 2: reaper is a little bit more challenging, but they can 454 00:23:13,240 --> 00:23:16,760 Speaker 2: change their operation very quickly. And here's the other thing, 455 00:23:16,760 --> 00:23:18,359 Speaker 2: and this is something that I like to talk to 456 00:23:18,520 --> 00:23:21,480 Speaker 2: analysts about because most of the time, as as standard 457 00:23:21,520 --> 00:23:24,200 Speaker 2: business people, you, me, and everybody else that's probably watching 458 00:23:24,200 --> 00:23:28,000 Speaker 2: this podcast, we just look at the bottom line and go, well, 459 00:23:28,320 --> 00:23:30,919 Speaker 2: profitability is not good enough. Why aren't you changing or 460 00:23:30,920 --> 00:23:34,680 Speaker 2: getting out or doing something different. Owner operators that serve 461 00:23:34,720 --> 00:23:37,920 Speaker 2: this segment, this is a lifestyle of them. It's not 462 00:23:38,000 --> 00:23:40,560 Speaker 2: just their job, it's a lifestyle. So they're not going 463 00:23:40,600 --> 00:23:43,200 Speaker 2: to leave something they love to do. They'll take a break, 464 00:23:43,400 --> 00:23:46,840 Speaker 2: they'll take a side hustle job. Their spouse shoesally works, 465 00:23:47,240 --> 00:23:50,000 Speaker 2: and so a lot of these truckers will make when 466 00:23:50,000 --> 00:23:53,560 Speaker 2: the markets are good, we'll make enough money and then 467 00:23:53,560 --> 00:23:56,560 Speaker 2: we'll take three months off. Believe it or not, during 468 00:23:56,560 --> 00:23:59,040 Speaker 2: the pandemic, when the rates were the highest they've ever 469 00:23:59,080 --> 00:24:03,119 Speaker 2: been since deregulation, they drove an average of ten thousand 470 00:24:03,200 --> 00:24:07,000 Speaker 2: less miles. Makes any sense, does it. You're making the 471 00:24:07,040 --> 00:24:08,840 Speaker 2: best money you've ever made in your life, and you're 472 00:24:08,880 --> 00:24:12,000 Speaker 2: going to like not do it. You and I standard 473 00:24:12,000 --> 00:24:14,080 Speaker 2: business people to look at that way. But they made 474 00:24:14,160 --> 00:24:16,919 Speaker 2: enough to enjoy other parts of their life. So this 475 00:24:17,040 --> 00:24:20,280 Speaker 2: is why it's very difficult, or you're never going to 476 00:24:20,359 --> 00:24:23,000 Speaker 2: not have a pretty healthy spot market or a small 477 00:24:23,080 --> 00:24:26,000 Speaker 2: carrier part of the marketplace. And that's why. Now brokers 478 00:24:26,000 --> 00:24:27,920 Speaker 2: are very different, and so I love let's talk about 479 00:24:27,960 --> 00:24:30,480 Speaker 2: the sentiment of the brokers. So brokers are very different, right, 480 00:24:31,320 --> 00:24:36,160 Speaker 2: standard operating business. They're a labor intensive business because what 481 00:24:36,200 --> 00:24:40,200 Speaker 2: they bring is the facilitation of information to be able 482 00:24:40,720 --> 00:24:42,960 Speaker 2: to be able to move freight for someone a shipper. 483 00:24:43,000 --> 00:24:47,359 Speaker 2: By the way, here's the interesting statistic of the roughly 484 00:24:47,400 --> 00:24:50,399 Speaker 2: four million shippers that are in the United States manufacturers 485 00:24:50,440 --> 00:24:51,680 Speaker 2: that are in the United States that need to move 486 00:24:51,720 --> 00:24:55,680 Speaker 2: freight known as shippers, only about fifteen percent of that's 487 00:24:55,720 --> 00:24:57,840 Speaker 2: grown a little bit, maybe there might be seventeen percent 488 00:24:57,880 --> 00:25:01,200 Speaker 2: of them that can really beneficially move some of their freight. 489 00:25:01,520 --> 00:25:03,359 Speaker 2: And I say some because none of the shippers can 490 00:25:03,440 --> 00:25:06,439 Speaker 2: move all their freight because there's just too much and 491 00:25:06,440 --> 00:25:08,840 Speaker 2: that they don't have enough they're of their own trucks 492 00:25:08,840 --> 00:25:11,320 Speaker 2: to do it. But so that leaves a giant marketplace 493 00:25:11,359 --> 00:25:13,560 Speaker 2: about eighty five percent of the market that needs an 494 00:25:13,560 --> 00:25:16,960 Speaker 2: intermediary or a carrier larger, medium, or a large carrier 495 00:25:16,960 --> 00:25:19,480 Speaker 2: to move their freight. So, but it's easy for a 496 00:25:19,520 --> 00:25:22,920 Speaker 2: brokerage company who's an intermediary most intermediary. But this is 497 00:25:22,960 --> 00:25:25,080 Speaker 2: another thing. This is a good statistic for the analysts 498 00:25:25,119 --> 00:25:27,200 Speaker 2: to know. When you look at the brokerage part of 499 00:25:27,200 --> 00:25:30,479 Speaker 2: the marketplace, there's roughly about twenty thousand of them. Around 500 00:25:30,560 --> 00:25:34,119 Speaker 2: eleven thousand of them are the active part of the marketplace. 501 00:25:34,160 --> 00:25:36,800 Speaker 2: Eleven thousand, maybe twelve thousand, depending on how you look at it. 502 00:25:37,960 --> 00:25:39,760 Speaker 2: So those are the ones that are really moving freight 503 00:25:40,280 --> 00:25:44,520 Speaker 2: for a manufacturer shipping company. And when you take that 504 00:25:44,560 --> 00:25:48,080 Speaker 2: eleven thousand and you look at are they non asset 505 00:25:48,240 --> 00:25:51,879 Speaker 2: or asset based companies, it's about fifty to fifty. So 506 00:25:51,960 --> 00:25:53,600 Speaker 2: this is why I say that all the spot market 507 00:25:53,640 --> 00:25:55,879 Speaker 2: and all the contract marketplace are becoming a one place 508 00:25:56,000 --> 00:26:00,920 Speaker 2: market is because when you're a carrier, say you're say 509 00:26:00,960 --> 00:26:04,200 Speaker 2: you're Schneider, and you move you're a publicly traded multi 510 00:26:04,200 --> 00:26:07,840 Speaker 2: billion dollar company, you've got more than a billion dollars 511 00:26:07,840 --> 00:26:11,080 Speaker 2: of your revenue coming through your brokerage division. Because it's 512 00:26:11,119 --> 00:26:12,679 Speaker 2: an easy way for you to grow your business, as 513 00:26:12,680 --> 00:26:15,520 Speaker 2: we talked about in the beginning of the podcast. So 514 00:26:16,160 --> 00:26:18,840 Speaker 2: it's important to know that about this marketplace because this 515 00:26:18,920 --> 00:26:22,280 Speaker 2: marketplace with technology as technology moves forward, so analysts always 516 00:26:22,320 --> 00:26:24,439 Speaker 2: want to know what's going to change in marketplace. The 517 00:26:24,520 --> 00:26:28,240 Speaker 2: technology is beginning to take all players in this marketplace 518 00:26:28,240 --> 00:26:31,600 Speaker 2: and moving them into one one silo or one pipe 519 00:26:31,960 --> 00:26:35,120 Speaker 2: where all freight is going to be managed in one 520 00:26:35,160 --> 00:26:39,160 Speaker 2: sort of arena where you've got it's not there's contract 521 00:26:39,160 --> 00:26:41,399 Speaker 2: players and there's spot players, because believe it or not, 522 00:26:41,480 --> 00:26:43,760 Speaker 2: a lot of the spot players move contract freight. And 523 00:26:43,800 --> 00:26:47,280 Speaker 2: it's not just the brokerage companies of these big players 524 00:26:47,280 --> 00:26:49,439 Speaker 2: like Schneider as I'm using as a reference here, but 525 00:26:49,520 --> 00:26:52,639 Speaker 2: even someone like C. H. Robinson or TQL or these 526 00:26:52,680 --> 00:26:57,400 Speaker 2: bigger players are now the RXO just bought Coyote. Those 527 00:26:57,440 --> 00:27:01,600 Speaker 2: guys move a ton of contract and dedicated freight. So 528 00:27:01,760 --> 00:27:03,879 Speaker 2: all this marketplace is going to become one market with 529 00:27:03,960 --> 00:27:07,000 Speaker 2: one player. But these brokers can control their costs like 530 00:27:07,040 --> 00:27:10,119 Speaker 2: nobody's business because they're very very good at it. They 531 00:27:10,119 --> 00:27:12,639 Speaker 2: have a high level of technology, a high level of 532 00:27:13,119 --> 00:27:15,000 Speaker 2: most of them have a pretty high level of automation, 533 00:27:15,960 --> 00:27:18,080 Speaker 2: so they're able to control their costs really, really well. 534 00:27:18,440 --> 00:27:21,760 Speaker 2: So when they talk about recently that margins have been pinched, 535 00:27:22,040 --> 00:27:26,720 Speaker 2: it's more on the end of the smaller part of 536 00:27:26,720 --> 00:27:29,760 Speaker 2: the marketplace because it's a small company dominated part of 537 00:27:29,800 --> 00:27:32,280 Speaker 2: the marketplace. You have eleven thousand players. I think there's 538 00:27:32,400 --> 00:27:36,879 Speaker 2: only sixteen companies that measure themselves over a billion dollars. 539 00:27:37,320 --> 00:27:38,879 Speaker 2: So as you go down, it gets down to the 540 00:27:39,000 --> 00:27:42,480 Speaker 2: sort one hundred million fifty million really fast. So it's 541 00:27:42,560 --> 00:27:45,320 Speaker 2: proliferated with small players that make up the strength of 542 00:27:45,359 --> 00:27:49,000 Speaker 2: this marketplace because and here's why there's so many different 543 00:27:49,040 --> 00:27:52,520 Speaker 2: segments of freight. It's not the freight industry you can 544 00:27:52,560 --> 00:27:56,040 Speaker 2: slice and dice this thing one hundred different divisions, because 545 00:27:56,080 --> 00:27:59,000 Speaker 2: freight is so unique to what needs to be moved 546 00:27:59,320 --> 00:28:01,400 Speaker 2: in the geograph area that it's going to be moved 547 00:28:01,400 --> 00:28:03,600 Speaker 2: in that And this is why it's just it's hard 548 00:28:03,600 --> 00:28:05,439 Speaker 2: to look at it from one holistic place, because if 549 00:28:05,440 --> 00:28:08,359 Speaker 2: somebody says, oh, I'm really struggling, Well, what part of 550 00:28:08,359 --> 00:28:10,440 Speaker 2: the market are you're struggling. Oh I'm really doing good. 551 00:28:11,000 --> 00:28:12,520 Speaker 2: What part of the market are you're doing good? It 552 00:28:12,560 --> 00:28:15,200 Speaker 2: just depends on the type of commodity that they're moving 553 00:28:15,200 --> 00:28:18,200 Speaker 2: in the lanes they're moving in and uh so it's 554 00:28:18,240 --> 00:28:20,520 Speaker 2: been really interesting to see this marketplace come back to 555 00:28:20,560 --> 00:28:23,600 Speaker 2: a norm. And I just brokers are talking about their 556 00:28:23,640 --> 00:28:26,600 Speaker 2: gross margins, but they're also moving, you know, they're still 557 00:28:26,640 --> 00:28:30,080 Speaker 2: moving good volumes of freight. So most brokers I've talked 558 00:28:30,080 --> 00:28:32,160 Speaker 2: to have said, oh, I'm doing pretty well this year. 559 00:28:32,359 --> 00:28:36,520 Speaker 2: I'd like it to be better. But honestlyly, every trucker 560 00:28:36,800 --> 00:28:40,680 Speaker 2: and every broker that I've ever talked to always says, oh, 561 00:28:40,720 --> 00:28:43,880 Speaker 2: it could be better. Even during the pandemic, they were like, well, 562 00:28:44,200 --> 00:28:47,120 Speaker 2: you know, it could be better. So it's just sort 563 00:28:47,120 --> 00:28:49,959 Speaker 2: of part of the part of the personality of the industry. 564 00:28:50,120 --> 00:28:52,240 Speaker 1: You know, in addition to the truck and quarterly survey, 565 00:28:52,320 --> 00:28:56,560 Speaker 1: we also with truck Stop we do a semi annual survey, 566 00:28:56,800 --> 00:28:59,120 Speaker 1: and all these surveys could be found on the Blueberg terminal. 567 00:29:00,040 --> 00:29:02,640 Speaker 1: You know, you're talking about gross margins. The outlook for 568 00:29:02,680 --> 00:29:06,680 Speaker 1: gross margins from the brokers that we surveyed, which came 569 00:29:06,720 --> 00:29:10,240 Speaker 1: out a couple of weeks ago, thirty percent expects margins 570 00:29:10,280 --> 00:29:13,680 Speaker 1: deteriorate over the next six months, which is seven hundred 571 00:29:13,680 --> 00:29:17,400 Speaker 1: basis points more than the previous survey. So you know, 572 00:29:17,480 --> 00:29:21,760 Speaker 1: there is some some skepticism amount brokers over the next 573 00:29:21,800 --> 00:29:22,360 Speaker 1: six months. 574 00:29:22,440 --> 00:29:23,080 Speaker 3: But I would what I. 575 00:29:23,080 --> 00:29:25,719 Speaker 1: Would say is there are a lot more optimistic than 576 00:29:25,760 --> 00:29:29,560 Speaker 1: the truckers. You know, because about thirty nine percent of 577 00:29:29,600 --> 00:29:33,360 Speaker 1: the brokers thought the trucking market will get looser, while 578 00:29:33,400 --> 00:29:36,080 Speaker 1: fifty six percent of the truckers thought it would get looser. 579 00:29:36,160 --> 00:29:39,400 Speaker 1: So they definitely have a different perspective on the market, 580 00:29:39,520 --> 00:29:42,840 Speaker 1: not not at not as negative as as the owner 581 00:29:42,880 --> 00:29:46,360 Speaker 1: operators to your point, because the owner operators, you know, 582 00:29:46,400 --> 00:29:48,840 Speaker 1: they feel it day to day because if you know, 583 00:29:48,960 --> 00:29:51,840 Speaker 1: if when they're if they're not getting paid as much 584 00:29:51,880 --> 00:29:54,560 Speaker 1: as they were, you know, they're really filling the bite. 585 00:29:54,600 --> 00:29:59,120 Speaker 1: And that gets magnified with you know, news reports about 586 00:29:59,240 --> 00:30:01,640 Speaker 1: consumer comp FID and all things like that. 587 00:30:02,280 --> 00:30:06,000 Speaker 2: You know, I love research, and I love it because 588 00:30:06,000 --> 00:30:08,240 Speaker 2: I'm a math guy. I just look at the mathematics 589 00:30:08,240 --> 00:30:11,080 Speaker 2: of this and number one, we're we're in a necessary marketplace, 590 00:30:11,160 --> 00:30:14,880 Speaker 2: so it's not going to go away. And so I 591 00:30:14,920 --> 00:30:17,160 Speaker 2: get to ask that question all the time, you know, 592 00:30:17,200 --> 00:30:20,000 Speaker 2: about when's the marketplace going to come back? And when 593 00:30:20,040 --> 00:30:22,800 Speaker 2: are things going to go on? Well, in some cases, 594 00:30:22,840 --> 00:30:25,480 Speaker 2: it's never going back to what it was in the 595 00:30:25,520 --> 00:30:28,480 Speaker 2: pandemic because that's an outlier. One of my favorite, one 596 00:30:28,520 --> 00:30:30,880 Speaker 2: of my favorite writers, Michael gla Well, it's an outlier 597 00:30:30,960 --> 00:30:35,720 Speaker 2: market that was very unique. It was driven by not 598 00:30:35,880 --> 00:30:39,920 Speaker 2: a trucking related influence on changing the market. So let 599 00:30:39,960 --> 00:30:43,040 Speaker 2: me explain this to the people that are listening. So 600 00:30:43,680 --> 00:30:46,360 Speaker 2: if you look at the two thousand and three, the 601 00:30:46,400 --> 00:30:51,280 Speaker 2: two thousand and fifteen, fourteen fifteen, you look at even 602 00:30:51,320 --> 00:30:56,880 Speaker 2: seventeen eighteen, big increases inside of transportation for costs or 603 00:30:57,200 --> 00:31:01,120 Speaker 2: the price to move goods, those were all created by 604 00:31:01,320 --> 00:31:06,640 Speaker 2: a trucking influence called regulations, whether it be hours of service, 605 00:31:06,680 --> 00:31:09,000 Speaker 2: whether it be elds, whether it be something that was 606 00:31:09,040 --> 00:31:13,120 Speaker 2: passed by the federal government, is all trucking related. And 607 00:31:13,160 --> 00:31:15,160 Speaker 2: those will happen again with the drug Watch, the Drug 608 00:31:15,160 --> 00:31:19,040 Speaker 2: and Alcoholic Clearing clearing House. Look at what's maybe going 609 00:31:19,040 --> 00:31:21,400 Speaker 2: on with even AB five, or look at what's going 610 00:31:21,440 --> 00:31:23,720 Speaker 2: on with the EPA. So those three things are going 611 00:31:23,800 --> 00:31:26,240 Speaker 2: to be the biggest changers in this marketplace. When you 612 00:31:26,280 --> 00:31:28,200 Speaker 2: see it start to go back up, it'll be because 613 00:31:28,200 --> 00:31:34,120 Speaker 2: of that, because that's trucking. That's a trucking that's trucking influence. 614 00:31:34,120 --> 00:31:36,760 Speaker 2: That's a regulations, that's we're influenced trucking now during the 615 00:31:36,800 --> 00:31:42,080 Speaker 2: pandemic is very different. What usually drives pricing increases is 616 00:31:42,120 --> 00:31:46,440 Speaker 2: the pinching of capacity, right, so the capacity gets tighter. 617 00:31:46,600 --> 00:31:49,120 Speaker 2: If you change the hours of service, there's less hours 618 00:31:49,120 --> 00:31:51,560 Speaker 2: that can be driven on the road. Changes capacity. You 619 00:31:51,560 --> 00:31:53,640 Speaker 2: want to know why twenty seventeen twenty eighteen was so big. 620 00:31:53,920 --> 00:31:59,160 Speaker 2: Elds pinched the available hours of driving down because every 621 00:31:59,200 --> 00:32:00,600 Speaker 2: truck in the United States, we're trying to figure ou 622 00:32:00,600 --> 00:32:02,240 Speaker 2: how to use an ELD and it took forty six 623 00:32:02,280 --> 00:32:05,120 Speaker 2: percent of their hours available out of the market. Made 624 00:32:05,160 --> 00:32:08,480 Speaker 2: prices go way up. So those things so during the pandemic, 625 00:32:09,120 --> 00:32:11,280 Speaker 2: we all stayed home and we all bought a bunch 626 00:32:11,280 --> 00:32:13,680 Speaker 2: of stuff because us consumers, they are very good at it. 627 00:32:13,680 --> 00:32:16,080 Speaker 2: We all bought everything new for our home offices at 628 00:32:16,120 --> 00:32:18,280 Speaker 2: our houses and so the movie were working from home. 629 00:32:18,320 --> 00:32:21,960 Speaker 2: I want a better environment. So the buying of goods 630 00:32:22,000 --> 00:32:25,760 Speaker 2: increased forty percent over normal. Well, every good hits a truck, 631 00:32:26,040 --> 00:32:29,880 Speaker 2: so you had a volume increase of the need of 632 00:32:29,880 --> 00:32:32,080 Speaker 2: freight to be moved. So it was a different pressure 633 00:32:32,120 --> 00:32:33,960 Speaker 2: point on that. But we're not going to go back 634 00:32:34,000 --> 00:32:36,160 Speaker 2: to that volume of buying again anytime soon in the 635 00:32:36,240 --> 00:32:38,640 Speaker 2: United States because we're not going to have another pandemic 636 00:32:38,720 --> 00:32:42,080 Speaker 2: or another situation is going to cause a changing consumer buying. 637 00:32:42,120 --> 00:32:44,840 Speaker 2: That way, the balance of services and goods has gone 638 00:32:44,920 --> 00:32:47,520 Speaker 2: back to normal. You know, it's a sixty to forty split. 639 00:32:48,160 --> 00:32:51,240 Speaker 2: So it's going to be something inside of regulation. So 640 00:32:51,320 --> 00:32:52,760 Speaker 2: to all the analysts out there, if you really want 641 00:32:52,800 --> 00:32:57,400 Speaker 2: to understand how trucking goes up and down, watch the regulations. 642 00:32:57,960 --> 00:33:00,719 Speaker 2: We've got Noel Perry, our chief economist, has great slide 643 00:33:00,960 --> 00:33:03,600 Speaker 2: and regulations. He's one of the foremost guys that looks 644 00:33:03,600 --> 00:33:06,800 Speaker 2: at the impact of regulations on this marketplace. We publish 645 00:33:06,840 --> 00:33:10,600 Speaker 2: it out quite a bit on how those impact, how 646 00:33:10,640 --> 00:33:14,040 Speaker 2: the regulations impact the need for additional capacity in the 647 00:33:14,080 --> 00:33:16,640 Speaker 2: marketplace as it gets constrained in different areas, which will 648 00:33:16,680 --> 00:33:19,280 Speaker 2: change the pricing in the marketplace. That's the big changer. 649 00:33:20,200 --> 00:33:22,520 Speaker 2: And the more you know about that, the more you'll 650 00:33:22,600 --> 00:33:24,480 Speaker 2: understand how this market going up and down. 651 00:33:25,480 --> 00:33:28,720 Speaker 1: Right, And you know you mentioned it might be a 652 00:33:28,760 --> 00:33:30,800 Speaker 1: little too early to talk about it, but the EPA 653 00:33:30,920 --> 00:33:33,760 Speaker 1: has a new mandate for twenty twenty seven. Are you 654 00:33:33,920 --> 00:33:36,400 Speaker 1: hearing anything from you know, the people that you talk 655 00:33:36,480 --> 00:33:40,000 Speaker 1: to about the impact of that, or you know, maybe 656 00:33:40,000 --> 00:33:42,440 Speaker 1: it might get pushed back depending on you know who's 657 00:33:42,440 --> 00:33:43,120 Speaker 1: in the White House. 658 00:33:44,080 --> 00:33:46,960 Speaker 2: Well, yeah, that's the big deal. Right, So if if 659 00:33:47,000 --> 00:33:50,760 Speaker 2: we if the current administration or the sort of mindset 660 00:33:50,760 --> 00:33:55,040 Speaker 2: of the current administration stays in office, that that'll that'll 661 00:33:55,040 --> 00:34:00,480 Speaker 2: get pushed harder faster if the other side of the 662 00:34:00,480 --> 00:34:03,520 Speaker 2: equation gets put in the office. And I'm not aspired, 663 00:34:03,520 --> 00:34:07,680 Speaker 2: I'm not inspiring anything else. If you look at the 664 00:34:07,800 --> 00:34:13,360 Speaker 2: history of that administration, they tend to go less regulations. 665 00:34:13,840 --> 00:34:18,080 Speaker 2: I mean that the Trump administration cut tremendous regulations inside 666 00:34:18,080 --> 00:34:21,520 Speaker 2: of transportation. Transportation loved it because it gave them more 667 00:34:21,560 --> 00:34:25,400 Speaker 2: freedom to be able to haul. But where there's maybe 668 00:34:25,600 --> 00:34:27,800 Speaker 2: the and trucking. By the way, trucking is all about 669 00:34:27,800 --> 00:34:30,520 Speaker 2: being clean. They have no problem being clean in the marketplace. 670 00:34:30,560 --> 00:34:32,040 Speaker 2: They just want to be able to do it profitably 671 00:34:32,480 --> 00:34:35,600 Speaker 2: and not just wreck an industry. And that's why that's 672 00:34:35,640 --> 00:34:39,320 Speaker 2: why the challenge with in California with the regulations, the 673 00:34:39,680 --> 00:34:44,040 Speaker 2: EPA regulations in California and the independent Contractor Status informations 674 00:34:44,040 --> 00:34:47,560 Speaker 2: that's AB five in California. For any analyst doesn't understand that. 675 00:34:47,719 --> 00:34:49,760 Speaker 2: You can look up all that there's been tremendous writing 676 00:34:49,800 --> 00:34:54,959 Speaker 2: on that changes the availability of capacity inside of any 677 00:34:55,120 --> 00:34:58,240 Speaker 2: any any state, or any part or any geographic region, 678 00:34:58,560 --> 00:35:01,080 Speaker 2: which will change pricing. If you don't have trucks to 679 00:35:01,120 --> 00:35:03,560 Speaker 2: move it, the prices are going to increase big time. 680 00:35:04,040 --> 00:35:05,600 Speaker 2: If you have plenty of trucks to move it, it'll 681 00:35:05,600 --> 00:35:09,000 Speaker 2: seek its normal balance and it'll be a balance between 682 00:35:09,080 --> 00:35:12,080 Speaker 2: what shippers are willing to pay and what the marketplace 683 00:35:12,160 --> 00:35:15,160 Speaker 2: is willing to accept. But on the EPA end, so 684 00:35:15,200 --> 00:35:17,320 Speaker 2: it'll be very interesting. There's always going to be EPA 685 00:35:17,360 --> 00:35:20,600 Speaker 2: stuff because we I mean, look, we all want clean ear, 686 00:35:20,880 --> 00:35:25,560 Speaker 2: all truckings all for that. But how you do it 687 00:35:25,600 --> 00:35:27,680 Speaker 2: is a different story. Because every time you make an 688 00:35:27,680 --> 00:35:32,080 Speaker 2: EPA change with the engine, the engine goes in a truck, 689 00:35:32,320 --> 00:35:34,400 Speaker 2: the truck price goes up. I remember during all the 690 00:35:34,480 --> 00:35:38,200 Speaker 2: changes in the two thousands, every time the EPA had 691 00:35:38,239 --> 00:35:41,799 Speaker 2: their next mandate, truck prices went up by ten thousand dollars. 692 00:35:42,080 --> 00:35:44,719 Speaker 1: Yeah, I've seen studies where the twenty twenty seven many 693 00:35:44,760 --> 00:35:47,800 Speaker 1: dates might increase truck prices by around thirty thousand dollars. 694 00:35:48,280 --> 00:35:51,120 Speaker 2: Not surprised, ye, which will be interesting. 695 00:35:50,920 --> 00:35:53,719 Speaker 1: Because if everyone's making the same amount per mile, I 696 00:35:54,000 --> 00:35:57,919 Speaker 1: don't know how that makes economic sense. But I think 697 00:35:57,920 --> 00:35:59,879 Speaker 1: there's a lot of things to still work out about 698 00:36:00,480 --> 00:36:01,520 Speaker 1: those new mandates. 699 00:36:01,880 --> 00:36:04,120 Speaker 2: Well for sure, for sure, And the good thing is 700 00:36:04,160 --> 00:36:06,400 Speaker 2: that trucks become more Trucks are actually becoming more and 701 00:36:06,400 --> 00:36:08,720 Speaker 2: more efficient. So back when I got in the industry 702 00:36:08,719 --> 00:36:11,680 Speaker 2: in ninety eight, the average, you know, per truck was 703 00:36:11,680 --> 00:36:14,839 Speaker 2: about five miles per gallon. Well, I know many many 704 00:36:14,840 --> 00:36:18,120 Speaker 2: people there they're averaging between seven and eight, and I 705 00:36:18,160 --> 00:36:24,320 Speaker 2: know some that are averaging over ten. And so efficiency efficiency, efficiency. 706 00:36:24,360 --> 00:36:27,560 Speaker 2: When your largest cost is fuel and it's all about 707 00:36:27,560 --> 00:36:29,839 Speaker 2: the miles on the road, you have to have great 708 00:36:29,880 --> 00:36:32,640 Speaker 2: operating efficiency because that's what you can control. And then 709 00:36:32,640 --> 00:36:33,839 Speaker 2: the rest of the part of the market you really 710 00:36:33,880 --> 00:36:36,839 Speaker 2: can't control because it's a supplying de man marketplace. Right. 711 00:36:37,320 --> 00:36:39,160 Speaker 1: Well, Brent, you know you see you know you mentioned 712 00:36:39,160 --> 00:36:40,879 Speaker 1: you've been in the industry for quite some time. 713 00:36:41,200 --> 00:36:43,680 Speaker 3: Yeah, how did you get into it? 714 00:36:43,680 --> 00:36:46,839 Speaker 1: Because I find people either they're born into it, into 715 00:36:46,880 --> 00:36:49,160 Speaker 1: a family business, or they kind of fall into it. 716 00:36:49,560 --> 00:36:51,520 Speaker 3: How did you get into the transportation world? 717 00:36:51,800 --> 00:36:53,759 Speaker 2: Well, man, thanks. That's I always love to talk about 718 00:36:53,760 --> 00:36:56,440 Speaker 2: this because I grew up in the steel industry. My 719 00:36:56,520 --> 00:37:00,360 Speaker 2: dad owned a little small steel processing company. And my 720 00:37:00,440 --> 00:37:02,520 Speaker 2: dad has three sons and I'm the middle son, and 721 00:37:02,560 --> 00:37:05,720 Speaker 2: we were kind of his his labor when he didn't 722 00:37:05,840 --> 00:37:09,200 Speaker 2: have other labor available. So we worked on nights and weekends, 723 00:37:09,800 --> 00:37:13,719 Speaker 2: and but we my dad always said, hey, you're gonna 724 00:37:13,840 --> 00:37:15,920 Speaker 2: you're gonna learn the business. You're not gonna work in 725 00:37:15,920 --> 00:37:19,719 Speaker 2: the office, so you understand what we do why that's important. 726 00:37:19,960 --> 00:37:21,959 Speaker 2: So we worked out on the dock. Man. I learned 727 00:37:22,000 --> 00:37:23,960 Speaker 2: to run a fort truck, and I so when you 728 00:37:24,040 --> 00:37:26,120 Speaker 2: learn to run a fort truck, you load trucks because 729 00:37:26,160 --> 00:37:27,759 Speaker 2: this steel has to be put on a truck that's 730 00:37:27,800 --> 00:37:30,600 Speaker 2: in delivery. I live in I grew up in Birmingham, Alabama, 731 00:37:30,640 --> 00:37:33,000 Speaker 2: the steel capital, right, you know, other other than up 732 00:37:33,000 --> 00:37:37,600 Speaker 2: in Allentown. But so I was running truck drivers a 733 00:37:37,640 --> 00:37:40,880 Speaker 2: lot and had a real affinity for truck drivers and 734 00:37:40,920 --> 00:37:42,640 Speaker 2: what they did, even road in a truck many times 735 00:37:42,640 --> 00:37:44,520 Speaker 2: when we deliver across town and stuff and had a 736 00:37:44,520 --> 00:37:48,560 Speaker 2: fun time doing that. And then in nineteen ninety seven, 737 00:37:48,800 --> 00:37:50,960 Speaker 2: one of my best friends that I went to Auburn 738 00:37:51,040 --> 00:37:53,440 Speaker 2: university with asked me to come to work for Randall 739 00:37:53,520 --> 00:37:55,680 Speaker 2: Rally Business Media, which is if you look behind, well 740 00:37:55,680 --> 00:37:57,279 Speaker 2: you know we're not on a camera. But I've got 741 00:37:57,320 --> 00:38:00,560 Speaker 2: a rent a rousse Brandy. Randall Rally Business Media is 742 00:38:00,640 --> 00:38:04,839 Speaker 2: the media leader in two different segments that are interrelated, 743 00:38:05,120 --> 00:38:10,400 Speaker 2: transportation and construction. They're very interrelated industries. And so I 744 00:38:10,719 --> 00:38:13,120 Speaker 2: started learning the trucking industry at ninety eight. Just fell 745 00:38:13,160 --> 00:38:16,799 Speaker 2: in love with it. Man, I just I won't leave 746 00:38:16,840 --> 00:38:18,520 Speaker 2: it because I love being a part of it. I 747 00:38:18,520 --> 00:38:20,719 Speaker 2: feel like it's a part of me. So ninety eight, 748 00:38:20,760 --> 00:38:22,520 Speaker 2: I worked there for fifteen years. I really got to 749 00:38:22,600 --> 00:38:27,200 Speaker 2: understand all the manufacturers, trucking manufacturers, will manufacturers, tire manufacturers, 750 00:38:27,200 --> 00:38:30,240 Speaker 2: suppliers to the marketplace. Got to know them really, really well. 751 00:38:30,719 --> 00:38:33,960 Speaker 2: And then but I had this customer named Scott Moscrip, 752 00:38:34,000 --> 00:38:37,000 Speaker 2: who I learned. You know, we became close friends. He's 753 00:38:37,040 --> 00:38:40,920 Speaker 2: the guy that started truck Stop and back in nineteen 754 00:38:41,000 --> 00:38:44,560 Speaker 2: ninety five as a solution to help owner operators have 755 00:38:44,640 --> 00:38:46,920 Speaker 2: availability to the information of the frate. US joined there 756 00:38:46,920 --> 00:38:50,120 Speaker 2: in ninety eight and I've been able to work for 757 00:38:50,160 --> 00:38:53,480 Speaker 2: two of the most important groups that helped small owner 758 00:38:53,520 --> 00:38:57,360 Speaker 2: operators be successful. Overdrive was a sort of the bible 759 00:38:57,480 --> 00:39:00,680 Speaker 2: for owner operators to run their business, and truck Stop 760 00:39:00,880 --> 00:39:03,760 Speaker 2: is was the first company that helped give owner operators 761 00:39:03,800 --> 00:39:06,560 Speaker 2: available to the freight. And So I've been at truck 762 00:39:06,560 --> 00:39:08,640 Speaker 2: Stop for eleven years and just absolutely love what I 763 00:39:08,640 --> 00:39:10,759 Speaker 2: do because I know what I do helps truckers make 764 00:39:10,840 --> 00:39:13,239 Speaker 2: money every single day, and brokers too because we help 765 00:39:13,280 --> 00:39:14,719 Speaker 2: put them together. So that's kind of how I got 766 00:39:14,760 --> 00:39:17,560 Speaker 2: in the industry. And then and then as being with 767 00:39:17,600 --> 00:39:20,040 Speaker 2: truck Stop, I get to have great relationships with guys 768 00:39:20,080 --> 00:39:22,680 Speaker 2: like Lee Clascow Bloomberg. I get to meet with all 769 00:39:22,680 --> 00:39:25,040 Speaker 2: these other CEOs and the people in the marketplace. That's 770 00:39:25,080 --> 00:39:28,040 Speaker 2: been great, good, that's that's great. 771 00:39:28,200 --> 00:39:30,600 Speaker 1: And you know when we made when you be to 772 00:39:30,640 --> 00:39:33,920 Speaker 1: the introduction, I mentioned that you're married with six kids, 773 00:39:34,080 --> 00:39:36,879 Speaker 1: I'd ask you what you do outside for work, for fun? 774 00:39:36,960 --> 00:39:38,799 Speaker 1: But with six kids, I'd imagine you don't have that 775 00:39:38,880 --> 00:39:41,240 Speaker 1: much time. Did you get any time to do anything 776 00:39:41,239 --> 00:39:43,480 Speaker 1: besides working and raising a family? 777 00:39:44,000 --> 00:39:48,200 Speaker 2: Yeah? Well, you know what what, I helped start a 778 00:39:48,200 --> 00:39:50,040 Speaker 2: nonprofit here in town, which was a lot of fun. 779 00:39:50,120 --> 00:39:52,440 Speaker 2: It's helping high schoolers and some of the hardest set 780 00:39:52,480 --> 00:39:55,720 Speaker 2: high schools move from a fifty percent chance of graduation 781 00:39:55,760 --> 00:39:57,799 Speaker 2: to a ninety percent chance of graduation. I just want 782 00:39:57,800 --> 00:40:00,239 Speaker 2: to like help people in their lives. Really, that's that's 783 00:40:00,239 --> 00:40:01,200 Speaker 2: the passion of mine. 784 00:40:01,520 --> 00:40:03,120 Speaker 3: What's what's the name of the organization. 785 00:40:03,760 --> 00:40:07,319 Speaker 2: It's called Elevate USA, and it's a it's We're in 786 00:40:07,400 --> 00:40:10,880 Speaker 2: twenty states and about forty schools. We help about thirteen 787 00:40:10,960 --> 00:40:14,040 Speaker 2: thousand high school students every single day, and the hardest 788 00:40:14,120 --> 00:40:18,279 Speaker 2: hits high schools in their city. That we started one 789 00:40:18,320 --> 00:40:20,600 Speaker 2: in Tuscalousa, but it's it's a nationwide thing. It's based 790 00:40:20,640 --> 00:40:23,040 Speaker 2: in Denver. So thanks for asking me about that. But yeah, 791 00:40:23,040 --> 00:40:25,640 Speaker 2: I think in the end, you know, what we want 792 00:40:25,800 --> 00:40:28,960 Speaker 2: in our lives is when we create any success, we 793 00:40:29,000 --> 00:40:32,120 Speaker 2: just want to make sure that that I did what 794 00:40:32,160 --> 00:40:34,279 Speaker 2: I do in my life, did it create significance in 795 00:40:34,320 --> 00:40:37,480 Speaker 2: someone else's life. And so that's really to me one 796 00:40:37,480 --> 00:40:39,520 Speaker 2: of the most important things when you look at why 797 00:40:39,560 --> 00:40:41,680 Speaker 2: are we busting our behinds and working so hard to 798 00:40:41,680 --> 00:40:44,200 Speaker 2: try to create success for ourselves and our families and 799 00:40:44,200 --> 00:40:46,640 Speaker 2: for our industries. You know, But really, when you when 800 00:40:46,680 --> 00:40:48,359 Speaker 2: you get a little older, now that I'm fifty seven, 801 00:40:48,400 --> 00:40:50,240 Speaker 2: it's like Okay, what am I doing that's really helping 802 00:40:50,239 --> 00:40:51,600 Speaker 2: others And really that's one of the reason why I 803 00:40:51,640 --> 00:40:55,640 Speaker 2: love truck Stop because it helps small businesses in America 804 00:40:56,080 --> 00:40:58,080 Speaker 2: chase their dream and so I like to do the 805 00:40:58,080 --> 00:40:59,480 Speaker 2: same thing with my personal life. 806 00:40:59,560 --> 00:41:03,960 Speaker 1: All right, great, that's uh, well, if it's if it's 807 00:41:03,960 --> 00:41:06,840 Speaker 1: worth anything, the relationship that you and I had is 808 00:41:06,880 --> 00:41:09,560 Speaker 1: added to to to the well being of my life. 809 00:41:09,560 --> 00:41:12,560 Speaker 2: So thank you for that. 810 00:41:13,040 --> 00:41:15,400 Speaker 1: All right, Well, thanks, Brent. I really want to thank 811 00:41:15,440 --> 00:41:16,360 Speaker 1: you for your time today. 812 00:41:16,920 --> 00:41:19,640 Speaker 2: Hey, it's my pleasure man. Anytime we can help Bloomberg 813 00:41:19,680 --> 00:41:21,759 Speaker 2: communicate to the market weok we need the we need 814 00:41:21,920 --> 00:41:25,759 Speaker 2: the marketplaces because you guys are the funding part. If 815 00:41:25,800 --> 00:41:27,880 Speaker 2: you look at what's happened last decade in this industry, 816 00:41:28,480 --> 00:41:33,239 Speaker 2: the the investors have helped this industry move forward to 817 00:41:33,239 --> 00:41:35,640 Speaker 2: be able to serve the American public because without funding 818 00:41:35,640 --> 00:41:37,160 Speaker 2: money and to be able to grow things and do 819 00:41:37,280 --> 00:41:41,360 Speaker 2: things that doesn't happen. And and they've the investor community 820 00:41:41,360 --> 00:41:44,680 Speaker 2: has helped transportation be able to serve the American public 821 00:41:44,719 --> 00:41:45,759 Speaker 2: better and better and better. 822 00:41:46,040 --> 00:41:48,799 Speaker 1: Yeah, And trucking is the Trucking is the back the 823 00:41:48,840 --> 00:41:53,040 Speaker 1: backbone of the US economy and it is so essential 824 00:41:53,239 --> 00:41:55,480 Speaker 1: for you know, our every day to day life that 825 00:41:55,520 --> 00:41:59,960 Speaker 1: I think a lot of people don't really you know, appreciate. 826 00:42:00,239 --> 00:42:03,319 Speaker 1: So for those truckers that are listening, thanks for all 827 00:42:03,360 --> 00:42:05,920 Speaker 1: you do, and I want to thank everyone for tuning in. 828 00:42:06,000 --> 00:42:08,680 Speaker 1: If you liked the episode, please subscribe and leave a review. 829 00:42:09,080 --> 00:42:12,000 Speaker 1: We've lined up a number of great guests for the podcast, 830 00:42:12,040 --> 00:42:16,400 Speaker 1: so check back to hear back conversations with C suite executives, shippers, regulators, 831 00:42:16,400 --> 00:42:19,719 Speaker 1: and decision makers within the freight markets. Also, if you 832 00:42:19,719 --> 00:42:22,360 Speaker 1: have an idea for a future episode, please hit me 833 00:42:22,400 --> 00:42:25,600 Speaker 1: up on the Bloomberg terminal or on Twitter at logistics Lee. 834 00:42:25,719 --> 00:42:34,239 Speaker 1: Thanks everyone, and have a great day.